May 1 Wall Street's industry-funded watchdog is
asking for public input on a retooled plan designed to make it
easier for investors to research the backgrounds of brokerage
firms and brokers.
The Financial Industry Regulatory Authority (FINRA) wants
brokerages to feature a prominent link on their websites and
certain social media sites that automatically directs the public
to FINRA's free online disclosure database known as BrokerCheck.
FINRA's proposal, published on Wednesday, revamps an earlier
version that some brokerage industry groups had said was
unworkable because of concerns about how to display the link on
social media sites such as Facebook and Twitter.
FINRA had filed that version with the U.S. Securities and
Exchange Commission, which must review and approve its rules,
but then withdrew it.
The newly proposed version aims to address those concerns,
in part, by clarifying the contexts in which a link to
BrokerCheck must appear, the regulator said in its notice. For
example, the link would not have to appear in websites run by
outside companies that independently provide information about
financial advisers, FINRA said.
The plan would still require firms to include a link to
BrokerCheck from their websites and on profile pages they
publish for individual brokers.
FINRA reviewed several social media sites, including
Facebook and Google Inc's YouTube and conducted trials
to help determine where firms could place a direct link to
BrokerCheck, it said. The link could appear in a section common
to those sites where users include general information about
their individual pages under headings such as "about" or
Twitter presents challenges because of space limitations and
a set-up that does not let users post links in their profiles
that automatically direct the public to other sites. The
proposal would allow for alternatives, such as mentioning the
BrokerCheck website address, but not including an automatic link
to the site, FINRA said.
FINRA's new proposal is here: bit.ly/1uaabRu
Comments are due to FINRA by June 16.
(Reporting by Suzanne Barlyn; Editing by Cynthia Osterman)